Credit companies need to be confident that a credit transaction is being made by the authorised user of the credit account, who is their customer. This is normally achieved by providing the customer with a plastic credit card, which the customer then signs. The credit card may have embedded technology such as a hologram that makes the card itself hard to forge, although this is of little benefit if the card is lost or stolen. Unfortunately, it is sometimes possible for criminals to forge the signature on the credit card, thereby subverting the primary protection mechanism. One known counter-measure against such forgery is to add a PIN to the card. However, this then requires the customer to remember the PIN. Having to provide a signature and/or to enter a PIN at a store checkout also makes for a relatively cumbersome transaction procedure (and so may lead to increased queues).
A further problem with conventional credit cards concerns individual privacy. Thus such credit cards generally bear the name of the cardholder, and so disclose the identity of the customer to the merchant involved in the transaction. Repeated use of a credit card at a store then allows the merchant to build up a growing record of the customer, based on purchase patterns, and so on. This can be linked to the identity of the purchaser and assessed using data mining techniques and the like. Many customers however would prefer that merchants were not able to collect such information, and indeed their right to privacy may be recognised under data protection laws. Such customers would like to maintain their anonymity as much as possible while making credit transactions. However, this is not feasible with conventional credit cards.